Oregon grocers back ballot measure to stop future taxes

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Dive Brief:

Oregon food retailers are moving to ban future taxes on groceries and sugary drinks in that state, reported Oregon Public Broadcasting. Albertsons, Costco and Kroger are spending $1.2 million this month on a ballot initiative, with the Northwest Grocery Association lending the campaign another $97,000.

The group is ready to collect the 117,578 signatures needed to place the constitutional amendment on the ballot in November. Last week, the Oregon Supreme Court upheld a ballot title, which is the summary of a ballot measure that is eventually voted on. The ballot title was written by the state attorney general’s office, which is done to provide a neutral summary for voters.

The initiative is meant to accomplish two things: stop any effort to tax sugary drinks — one such effort is underway in Oregon’s Multnomah County, which includes Portland — and halt efforts to establish a gross receipts tax on the total gross revenues of companies.

Dive Insight:

When targeted food taxes make news, usually the grocery industry is playing defense. But not in Oregon, where food retailers are seeking to head off proposals to tax sugary drinks and gross receipts with a ballot initiative that will ban both plans. If successful, it will undoubtedly be emulated in other states.

Gross receipts taxes, also called gross excise taxes, are levied against the total gross revenues of a company. There are several of these in states across the country, although it is relatively unusual to see such a tax applied to food companies. The Oregon constitutional amendment does not address restaurant meals. Oregon Public Broadcasting said Oregon voters strongly rejected a gross receipts initiative in 2016, but legislators remain interested in pushing for such a tax. On the national level, the Food Marketing Institute has called for lower taxes on grocery stores to minimize the impact on already slim margins, and consumer prices.

Taxes on sugary drinks, or soft drinks, are hotly debated around the country, and an initiative for the Portland area of Oregon has been pushed back from a May election to November at the earliest. Backers are hoping a higher turnout will increase chances of passing the measure. Any effort to thwart sugary drink taxes will get the support of the beverage industry, notably the big soft drink companies and their trade association, the American Beverage Association and its state-level affiliates.

A year-old sugary drink tax of 1.5 cents per ounce in Philadelphia has been monitored closely by both sides in the debate. While the industry has produced a study saying the area has lost jobs because of it, local officials point to higher revenue for schools and parks, reported Bloomberg. A study also found that 93% of the tax was passed along to consumers.

The strongest argument for such taxes is that they discourage the consumption of sugar by children. A report by the Citizens Against Government Waste, said a sugary drink tax in Seattle was not doing what it was expected to do. For example, retailers like Costco directed shoppers to stores outside the city limits where there is no tax. A similar tax in Cook County in Illinois was repealed after two months following a public outcry.

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